Mxit undergoing job cuts

Johannesburg - Mobile social network Mxit started offering voluntary severance packages to its staff on Friday in a move aimed at “streamlining” the company’s business, according to a spokesperson.

The social messaging service’s marketing and communications manager Ben-Carl Havemann told Fin24 that a voluntary severance package process is underway.

Havemann was not willing to disclose the extent of the job cuts or which of the company’s departments are being downsized.

"At this stage, it is still a voluntary process so I can't disclose anything about that until the process has been finalised,” Havemann told Fin24.

Havemann also gave Fin24 a separate media statement issued on 28 November that said Mxit plans to “scale down on non-core expenditure that does not materially relate to essential operations”.

This move comes about as Mxit plans placing a “bigger emphasis on its social services, and new ways to expand the footprint of these with a number of technology and media partners in the future”.

For example, a Trust called Mxit Reach, established by the company to improve lives through technology, is providing education, health and counselling services to more than “1.2 million users in South Africa on a monthly basis”. Mxit said Reach has “enjoyed strong year-on-year growth of 20%”.

“This ranges from life-enhancing digital education programmes and discreet text-based counselling to daily activities that stimulate mental and physical development in the critical first 1000 days of life,” said Mxit in the statement.

“The recent launch of the Ukufunda Virtual School, in partnership with the Department of Basic Education and Unicef, is an example of this,” added the company.

In the statement, Mxit called this a “strategic change in direction” that “will not affect users of the mobile social network, partner organisations and/or advertising clients”.

“Some business support functions may however be downsized, and in some cases externalised to give the company more flexibility to engage resources as and when required,” said Mxit. Mxit further said that additional products and services will be announced early in 2015.

Mxit faces intense competition

But Mxit, which used to be South Africa’s biggest social network, is also coming under growing pressure from rivals such as Facebook.

The World Wide Worx and Fuseware SA Social Media Landscape 2015 report ranked Facebook as the number one social media network in South Africa with 11.8 million users.

Meanwhile, Mxit has 4.9 million monthly active users. Twitter has 6.6 million users and YouTube has 7.2 million, according to the World Wide Worx and Fuseware study.

Yet, Mxit’s Havemann told Fin24 that the social network’s smaller user base is not affecting its advertising business.

But because Mxit is a private company, it does not reveal its financial results either.

"From an advertising point of the view the relationship with brands is stronger than it's ever been and we've put a lot of effort into those relationships and establishing a very good sales team,” he said.

Havemann also told Fin24 that the job cuts are “not going to affect Mxit whatsoever from a user or advertising point of view”.

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